Last week we noted Pope Francis’s
call for world financial reform. We
raised the possibility, however, that what the pope says about financial reform
might not be quite what some people
hear. Take, for example, the meaning of
“free competition.”
As we saw last week, whenever a
pope says something about the market or competition, those hearing it have a
tendency to put one of two meanings on it.
Either they think that unrestricted, cutthroat competition has been
endorsed, or total State control of the economy is absolutely mandated. (There are some gradations and shadings in
these positions, but that gives the extremes.)
Under these understandings of the
role of the State, any abuses in either system will presumably be held in check
by the personal virtue of the people in charge.
That is how we end up with greed as a virtue at one end of the spectrum,
and a divine right economic dictator at the other. It is no coincidence that Monetarists and
Austrians assume that the free market will somehow regulate itself without
outside interference from government, and the Keynesians and their clones always
call for some form of dictatorship because you simply cannot trust the private
sector to do anything right.
Both understandings are clearly
wrong, as a more careful reading of the passage we quoted last week from Quadragesimo Anno reveals. Primarily, “free competition” cannot mean “unfree competition.” That
rules out all forms of regulation that are simply external control by another
name, as well as State control in any other form.
This does not mean that
competition — or anything else — is carried on in a lawless environment. A free man, for example, is not released from
his obligation to obey just laws or even unjust laws, if breaking the unjust
laws would result in a greater evil than the law imposes. The popes’ comments assume a “strong
juridical framework” (Centesimus Annus,
§ 42) as a matter of course.
The fact is, consistent with the
laws and characteristics of social justice, the State has the job of
maintaining the common good, not providing for everyone’s individual good. That means looking after the system so that
people have a reasonable opportunity to provide for themselves. If they cannot, private charity should take
care of them.
If private charity proves
inadequate, the State can levy taxes to redistribute enough wealth to keep
people in reasonable health until the system can be changed so that people can
once again meet their own needs through their own efforts. As Leo XIII pointed out,
“Man's needs do not die
out, but forever recur; although satisfied today, they demand fresh supplies
for tomorrow. Nature accordingly must have given to man a source that is stable
and remaining always with him, from which he might look to draw continual
supplies. And this stable condition of things he finds solely in the earth and
its fruits. There is no need to bring in the State. Man precedes the State, and
possesses, prior to the formation of any State, the right of providing for the
substance of his body.” (Rerum Novarum,
§ 7.)